Wisdom from the Many sort choices offered in free markets. The aggregated wisdom of all of us, with each of us acting in our own self-interest, is wiser than the wisest of us at choosing between choices. Wisdom from the Many is repeatedly illustrated in the book, Wisdom of Crowds

Unlike how liberty intertwines to create the general welfare, we create government for the essential purpose of monopolizing violence to coerce compliance with law. Thomas Paine stated this clearly in Common Sense:

SOME writers have so confounded society with government, as to leave little or no distinction between them; whereas they are not only different, but have different origins. Society is produced by our wants, and government by our wickedness; the former promotes our happiness POSITIVELY by uniting our affections, the latter NEGATIVELY by restraining our vices. The one encourages intercourse, the other creates distinctions. The first is a patron, the last a punisher.

It is essential to properly combine the liberty and compliance with law:

Inclusive institutions foster creative-destruction, wealth and power.

Extractive institutions, government monopolies, stifle innovation to maintain the power base of the elite. American examples of extractive institutions:

The near century of rotary telephones under Federal monopoly.

The Federal highway monopoly's protection of the gas mileage of the Model-T (25 mpg) is another.

Federal support for Illicit Energy, energy outside self-reliance from slavery and foreign oil.

The difficulty we confront with coercing compliance with law while retaining inclusive institutions was well stated by Madison in Federalist #51:

Ambition must be made to counteract ambition. The interest of the man must be connected with the constitutional rights of the place. It may be a reflection on human nature, that such devices should be necessary to control the abuses of government. But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.

Because we are not angels, by the Consent of the Governed, we granted governments sovereignty to be the Monopoly of Violence. We bound ourselves to compliance with laws created by that grant of sovereignty. We also limited how much violence the Governing can apply by limiting sovereignty. Relative to the US Federal government, we very specifically limited its sovereignty to waging war and coercing activities that create the path to war.

Limited Federal sovereignty is vividly clear in how the Constitution replaced the Articles of Confederation. The Articles had proved incompetent in waging war during the Revolution, in preventing domestic insurrection (Shay's Rebellion), enforcing the Treaty of Paris, and skirmish between states over tarrifs and border disputes. We recognized that to survive as a nations, we need a general government that could coerce taxes from individual citizens to wage war. To limit the waging of war, we limited the Federal government to this one duty.

Federal mission statement, the Constitution's Preamble, states the limites of the Federal Monopoly of Violence:

Federal sovereignty is mandated to "provide" for the defense of Liberty for ourselves and our Posterity.

Federal sovereignty is restricted to only "promote" the "general welfare". We the People retained sovereignty and liberty over the "general welfare".

Men are not angels. The men seeking to govern are not angels. We forbid the men seeking Federal powers to apply violence from forcing their view of the "general welfare" on the Governed.

The Article 1, Section 8 is subordinated to the Preamble limits.

"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States"

James Madison, on the House floor during debates on a Cod Fishery bill (February 1792):"

“If Congress can apply money indefinitely to the general welfare, and are the sole and supreme judges of the general welfare, they may take the care of religion into their own hands; they may establish teachers in every State, county, and parish, and pay them out of the public Treasury; they may take into their own hands the education of children, establishing in like manner schools throughout the Union; they may undertake the regulation of all roads other than post roads. In short, every thing, from the highest object of State legislation, down to the most minute object of police, would be thrown under the power of Congress; for every object I have mentioned would admit the application of money, and might be called, if Congress pleased, provisions for the general welfare.”

Congress was not claim more powers than the Preamble grants to the entire Federal government. James Madison explains this to Andrew Stevenson, 27 Nov. 1830

The obvious conclusion to which we are brought is, that these terms, copied from the Articles of Confederation, were regarded in the new as in the old instrument, merely as general terms, explained and limited by the subjoined specifications, and therefore requiring no critical attention or studied precaution.

That the terms in question were not suspected in the Convention which formed the Constitution of any such meaning as has been constructively applied to them, may be pronounced with entire confidence; for it exceeds the possibility of belief, that the known advocates in the Convention for a jealous grant and cautious definition of Federal powers should have silently permitted the introduction of words or phrases in a sense rendering fruitless the restrictions and definitions elaborated by them.

Consider for a moment the immeasurable difference between the Constitution limited in its powers to the enumerated objects, and expounded as it would be by the import claimed for the phraseology in question. The difference is equivalent to two Constitutions, of characters essentially contrasted with each other--the one possessing powers confined to certain specified cases, the other extended to all cases whatsoever; for what is the case that would not be embraced by a general power to raise money, a power to provide for the general welfare, and a power to pass all laws necessary and proper to carry these powers into execution; all such provisions and laws superseding, at the same time, all local laws and constitutions at variance with them? Can less be said, with the evidence before us furnished by the journal of the Convention itself, than that it is impossible that such a Constitution as the latter would have been recommended to the States by all the members of that body whose names were subscribed to the instrument?

Passing from this view of the sense in which the terms common defence and general welfare were used by the framers of the Constitution, let us look for that in which they must have been understood by the Convention, or, rather, by the people, who, through their Conventions, accepted and ratified it. And here the evidence is, if possible, still more irresistible, that the terms could not have been regarded as giving a scope to Federal legislation infinitely more objectionable than any of the specified powers which produced such strenuous opposition, and calls for amendments which might be safeguards against the dangers apprehended from them.

Here are a majority of the States proposing amendments, in one instance thirty-three by a single State; all of them intended to circumscribe the powers granted to the General Government, by explanations, restrictions, or prohibitions, without including a single proposition from a single State referring to the terms common defence and general welfare; which, if understood to convey the asserted power, could not have failed to be the power most strenuously aimed at, because evidently more alarming in its range than all the powers objected to put together; and that the terms should have passed altogether unnoticed by the many eyes which saw danger in terms and phrases employed in some of the most minute and limited of the enumerated powers, must be regarded as a demonstration that it was taken for granted that the terms were harmless, because explained and limited, as in the "Articles of Confederation," by the enumerated powers which followed them.

A like demonstration that these terms were not understood in any sense that could invest Congress with powers not otherwise bestowed by the constitutional charter, may be found in what passed in the first session of the first Congress, when the subject of amendments was taken up, with the conciliatory view of freeing the Constitution from objections which had been made to the extent of its powers, or to the unguarded terms employed in describing them. Not only were the terms "common defence and general welfare" unnoticed in the long list of amendments brought forward in the outset, but the journals of Congress show that, in the progress of the discussions, not a single proposition was made in either branch of the Legislature which referred to the phrase as admitting a constructive enlargement of the granted powers, and requiring an amendment guarding against it. Such a forbearance and silence on such an occasion, and among so many members who belonged to the part of the nation which called for explanatory and restrictive amendments, and who had been elected as known advocates for them, cannot be accounted for without supposing that the terms "common defence and general welfare" were not at that time deemed susceptible of any such construction as has since been applied to them.

Allow me, my dear sir, to express on this occasion, what I always feel, an anxious hope that, as our Constitution rests on a middle ground between a form wholly national and one merely federal, and on a division of the powers of Government between the States in their united character and in their individual characters, this peculiarity of the system will be kept in view, as a key to the sound interpretation of the instrument, and a warning against any doctrine that would either enable the States to invalidate the powers of the United States, or confer all power on them.